Jack Dorsey creator, co-founder, and Chairman of Twitter and co-founder & CEO of Square arrives on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images
Shares of fintech firm Block surged as much as 19% in after-hours trading Thursday, after the company reported third-quarter earnings that beat analyst estimates on the top and bottom line and showed strong growth in both Cash App and Square revenue.
Here’s how the company did, compared to an analyst consensus from LSEG, formerly Refinitiv:
- Earnings per share: 55 cents, adjusted, vs. 47 cents expected
- Revenue: $5.62 billion vs. $5.44 billion expected
Block also hiked its guidance.
The company had previously guided to $1.5 billion in full-year adjusted EBITDA but now expects adjusted EBITDA to come in between $1.66 billion and $1.68 billion.
Block is guiding to adjusted full-year operating income of $205 million to $225 million, a sharp increase from prior guidance of $25 million. Analysts surveyed by LSEG had expected full-year revenue guidance to come in at $21.54 billion. The company didn’t provide full-year revenue guidance but did guide to $875 million in adjusted operating income for 2024.
Additionally, Block now expects 2023 gross profit ranging from $7.44 billion to $7.46 billion.
“In 2024 we expect a significant improvement in Adjusted Operating Income margin on a year-over-year basis in 2024 compared to 2023. Our outlook does not assume any additional macroeconomic deterioration, which could impact our results,” the company said in its shareholder letter.
Third-quarter net revenue grew 24% to $5.62 billion from $4.52 billion in the year-earlier period, with bitcoin revenue jumping to $2.42 billion from $1.76 billion. Gross profit climbed 21% to $1.9 billion from $1.57 billion.
Adjusted EBITDA came in at $477 million, compared to $327 million in the year-ago period. There was particularly strong growth in Block’s payment platform, Cash App, and its point-of-sale suite, Square. Cash App revenue soared $3.58 billion 34% year over year, while Square revenue grew 12% to $1.98 billion.
“We’ve been quiet lately because we’ve been focused,” Block co-founder Jack Dorsey said in a letter to shareholders. Block was the subject of a short seller report earlier this year that alleged its Cash App product facilitated fraud. “We want to thank all of you for your trust and continued belief in our work. We will work to balance that trust with accountability, some of which I hope this letter provides,” Dorsey’s letter concluded.
Dorsey said the company would focus on its go-to-market strategy, targeting local restaurants and services businesses to grow, and would refocus engineering talent using artificial intelligence technology.
On a conference call with analysts, Dorsey said he intends “to lead Square until we hit some milestones.”
“I want to see a significant return to growth, number one,” he said. “I want to see us be a lot more innovative and inventive and I want to see us connect our ecosystems better.”
WATCH: Earnings Exchange
